Beware - A Shortening of the 180-Day Exchange Period

IRC §1031(a)(3)(B) requires that Replacement Property be acquired by the earlier of:

(i) 180 days after the date Relinquished Property is transferred in the exchange,  OR

(ii) the due date (determined with regard to extensions) of the Taxpayer’s return for the taxable year in which the Relinquished Property is
transferred.

At this point in the tax year, the provision noted at (ii) above becomes critically important and, if ignored, could result in a failed exchange.

PLR 200631012

In Private Letter Ruling 200631012, the IRS concluded that an exchange of a New York co-op for a tenancy-in-common interest in both improved and unimproved property qualified for tax deferral under Internal Revenue Code Section 1031.

California Franchise Tax Board Changes for 2007

On September 22, 2006, the Governor signed AB 2962. This new law amends Revenue and Taxation Code Sections 18662 and 18668, making changes to real estate withholding requirements for all transactions closing on or after January 1, 2007.